Military exchanges sorting out how tariff hikes on Chinese imports will affect customers

It's unclear how the new tariff hike on many items imported from China will affect prices in military exchanges. In this file photo from Thursday, July 12, 2018, container ship Maersk Emerald is unloaded at the Port of Oakland, Calif. (Ben Margot, AP, File)

The military exchanges are waiting to see what effects the higher tariffs on goods imported to the U.S. from China will have, including what effect it might have on their customers’ prices. All the stores carry some items imported from China.

“We expect to be impacted by increases for components and finished goods, but it is too early to tell on which products at this point” in Marine Corps exchanges, said Bryan Driver, spokesman for the Marine Corps’ Business and Support Services division.

On May 10, U.S. Trade Representative Robert Lighthizer announced that the administration has increased the level of tariffs from 10 percent to 25 percent on about $200 billion worth of Chinese imports. The tariffs are being used to turn up the heat in the U.S. trade negotiations with China.

According to the Associated Press, the new tariff increases will affect thousands of items, such as seafood, furniture, bicycles, luggage, backpacks and handbags; businesses will pay more for things like telecom equipment, plastics and chemicals; car companies will pay more for auto parts.

Navy Exchange Service Command officials also “don’t fully know the extent or effect any new tariffs will have,” said spokeswoman Kristine Sturkie.

“Thus far, there has been no impact to Army and Air Force Exchange Service stores. It is too early to forecast future impacts,” said Chris Ward, spokesman for AAFES.

The full extent of the May 10 tariff hike is not being felt immediately, and it may not be for a few weeks. According to the May 9 notice in the Federal Register, the increase applies to goods exported from China to the U.S. on or after May 10, so goods that began the transit across the Pacific before that time were not affected by the increase in import duties. The U.S. initially imposed a 10 percent tariff on the goods; this action increases that to 25 percent.

But tariffs are proposed on many more items: President Trump also ordered officials to begin the process of raising tariffs on essentially all remaining imports from China, valued at about $300 billion. If these proposed additional tariffs go into effect, they will affect more consumers — hitting prices on virtually everything, including clothing, shoes, toys, electronics like the iPhone and televisions, and a wide variety of foods. It excludes pharmaceuticals and certain medical supplies. Public comments are due by June 17, according to the May 13 Federal Register announcement, which includes a 135-page list of the items that would be affected under the proposal.

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Virtually all retailers will feel the effects. “Taxing Americans on everyday products like clothes and shoes is not the answer for holding China accountable,” said Matthew Shay, president and CEO of the National Retail Federation, in a statement about the proposed additional tariffs.

“We support the administration’s efforts to deliver a meaningful trade agreement that levels the playing field for American businesses and workers. But the latest tariff escalation is far too great a gamble for the U.S. economy.

“Slapping tariffs on everything U.S. companies import from China — goods that support U.S. manufacturing and provide consumers with affordable products — will jeopardize American jobs and increase costs for consumers,” he said in the statement.

Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.

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